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Saturday, 17 April 10
DRY BULK SHIPPING MARKET ANALYSIS - BIMCO
 Strong Chinese steel market is set to cushion the flood of new Capesize vessels entering the dry bulk fleet Demand: The first quarter of 2010 saw ups and down for the BDI with the index hovering around 3,000. It seems as if the market is balanced on a knife edge. High supply is likely to overmatch even very healthy demand growth rates – strongly dependant on China.
Chinese iron ore imports continue to remain firm. In the first quarter of this year, China has imported an average of 51.68 million tons (mt) of ore. In 2009, iron ore imports reached a monthly average of 52.37mt, leaving this year’s ore imports just 1% short of 2009 levels, but still very healthy at 14.7mt (40%) more than 2008 levels. With steel prices rising above those of 2009 – Chinese iron ore imports will continue as the prime driver in the dry bulk market.
However, the present spot rates are not expected to stay that low as time charter rates stay strong as illustrated by the reported BHP Billiton booking of a Capesize vessel for 3-5 months at USD/day 37,000 - more than 30% premium to spot. The current FFA (Forward Freight Agreement) rates also point in that direction with Capesize Q2 FFA going up to USD/day 35,750 and Panamax Q2 going down to USD/day 28,500.
Supply:
The active fleet has grown by 3.5% during first quarter of 2010, caused by deliveries of 16 million DWT of newbuildings offset by just 1 million DWT being demolished. Since BIMCO Bulletin 1/2010, the total dry bulk order book has increased by 5.5 million DWT. It seems as though the optimism from surprisingly healthy freight rate levels in 2009 has made contracting go on – despite the fact that the 285 million DWT that comprises the order book today is doomed to make challenging markets in short as well as long-term.
Year-to-date deliveries in capesize amount to 47 ships comprising 8.7 million new DWT, resulting in an increased fleet size of 5% so far in 2010 and active Capesize vessel number 1,000 has just been delivered. At the beginning of 2009, 822 Capesize vessels were active, but an inflow of 112 newbuildings and 29 converted vessels was added to the existing fleet, counterbalanced by just 9 demolitions, leaving a fleet tonnage growth of 18.5% in 2009.
An additional 305 Capesize vessels are scheduled for delivery in 2010, but “only” 183 will hit the water, when applying the BIMCO assumptions for supply forecast as described next to the graphics. In total, this will in turn mean that Capesize tonnage could grow by 21% when fine-tuning for an average scrapping age of 26 years for Capesize vessels
as compared to the average of 30 years for the overall fleet.
BIMCO forecasts inflow of new dry bulk tonnage in 2010 to reach 76 million DWT, offset by demolition of as much as 13 million DWT. This could make the fleet grow by 14% in 2010 as compared to 10% in 2009. Deliveries in 2011 are forecast to be even higher before supply growth comes down in 2012.
Clarkson’s have scheduled deliveries of 120-130 million DWT in 2010. BIMCO assumes that 10% of the entire order book will not be built and one third of the rest will be deferred by one year. Furthermore, the demolition potential is calculated to 49 million DWT, equal to all vessels aged 30 or above to be demolished by the end of 2013.
Outlook:
The fortunes of the dry bulk markets are basically down to the fortunes of China. March was the 13th straight month that the official Chinese PMI (Purchasing Managers Index) has stood above the threshold of 50 that demarcates expansion from contraction, indicating that the Chinese economy is on a stable and relatively fast growth track. PMI rose to 55.1% in March, up 3.1% on last month, according to data released by the China Federation of Logistics & Purchasing.
The housing market and huge infrastructure projects have been primary beneficiaries of the Chinese Government’s stimulus package. With the construction sector being the number one steel user, consuming around 50% of Chinese steel, it goes without saying that a continuance of the strength in this sector is vital for the health of the dry bulk freight rates.
Freight rates are forecast by MSI to drift sideways on current levels over the next 6 months. Capesize rates are forecast to stay around USD 30-35,000 per day while the smaller vessel types could see rates go down from current levels to around USD 16-24,000 per day.
Current news:
BHP Billiton has reached agreement to sell the majority of its iron ore to Asian steel mills on shorter term contracts, ending more than 40 years of annual pricing. Brazilian Vale have also inked new iron ore prices – resulting in price hikes of around 90%– indicating a continued strong demand for the vital raw material in steel production. Contract prices for coking coal are also expected higher.
Meanwhile, the China-Rio Tinto bribery case has just been settled. The court in Shanghai sentenced the four convicted Australian mining giant Rio Tinto employees to prison for a total 39 years. They were found guilty after having admitted to accepting about USD 13 million in bribes from private steel mills that wanted to avoid purchasing iron ore from more costly state-run mills. The arrangement undercut the state’s China Iron and Steel Association’s desire for a united front in negotiating with Australian suppliers. Shortly after the verdict the employees were sacked for clear violation of Chinese Law and Rio Tinto’s code of conduct. China claims its steel sector paid as much at USD 160 million too much last year for iron ore because of bribery and espionage. While the three Chinese defendants have decided to appeal terms, the Australian national Stern Hu appears to be the only one not appealing terms.
Source: Bimco / Hellenic Shipping
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Wednesday, 26 October 11
PWCS GLOBAL SHIPPING BENCHMARKING ANALYSIS: RECOVERY IN 2010 BUT GREAT UNCERTAINLY FOR 2011
The recovery of global trade in 2010 to the same levels as 2008 led to an improvement in the overall performance of shipping companies in 2010 compa ...
Wednesday, 26 October 11
INDIAN MARKET WAS REMAINED TIGHT THE WHOLE LAST WEEK - BRS
The market once more seems to be at a crossroads. The indices last week remained fairly stable (except for the Panamax sector), ending the week as f ...
Tuesday, 25 October 11
DRY BULK MARKET STEADY, ANALYSTS LOOKING FOR ADDED PRESSURE ON THE MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was unchanged on Monday, with the industry’s benchmark, the BDI (Baltic Dry Index) ending the session at 2,153 points, exa ...
Monday, 24 October 11
NEW HEAD OF INDONESIA'S MINING MINISTRY GETS RAKED OVER THE COALS - JOSEPH KIRSCHKE
COALspot.com - Following Indonesia’s presidential cabinet shakeup last week, many are questioning the qualifications of Energy and Mineral Res ...
Monday, 24 October 11
CHINA QINHUANGDAO COAL PRICE RISES TO HIGHEST IN THREE YEARS - BUSINESSWEEK
Business week reported that, China’s power-station coal price rose to the highest level in three years as power stations and central heating p ...
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- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- The University of Queensland
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- PTC India Limited - India
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- White Energy Company Limited
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
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